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Your firm is considering entering a new territory. From market research, you have obtained the following demand function that explains how your price (P in
Your firm is considering entering a new territory. From market research, you have obtained the following demand function that explains how your price (P in dollars) and advertising (A in thousands of dollars) choices influence the quantity demanded (Q in thousands of units).
Q=20-6P+2A
To enter the new market you plan on running $5,000 worth of ads. The marginal cost of producing your product is $1 per unit.
3a) What is your profit maximizing price, quantity sold, and profit?
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